airport world, issue 3, 2013
TRANSCRIPT
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In the spotlight: Economics & Finance
Airports: Mumbai & Philadelphia
Special report: Social media
Plus: Leadership, CDM & airport design
Economics & finance:Money matters
JuneJuly 2013
Volume 18 Issue 3
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3AIRPORT WORLD/JUNE-JULY 2013
AW
OPINION
They may not be quite so loud or as
vocierous as they used to be a ew
years ago, but, in general, airlines
dont need much encouragement to
complain about high airport charges.
In act, hardly a month goes by without
some airline bleating about overly high ees or
warning that they may have to scale back
services or axe routes altogether i an airport
doesnt reduce its charges.
Indeed, airlines in the UK recently criticised
the Civil Aviation Authority ater it eectivelyproposed real-term CUTS to the amount
Heathrow can charge them or using its acilities.
To put this into context, the CAA has
proposed that airline charges at Heathrow or
the period 2014 to 2019 should be capped at
the Retail Prices Index (RPI) rate o ination
minus 1.3% down rom current charges o
RPI plus 7.5% or the period 2009 to 2014.
And there was good news o sorts or
airlines at Gatwick, too, where the CAA
proposed a price cap o RPI plus 1% or the fveyears to April 2019 rom a current average
charge o RPI plus 2%. While at Stansted, where
passenger numbers have allen, the CAA chose
to monitor charges rather than impose a cap.
Yet the response rom the airlines has been
somewhat hysterical, IAGs Willie Walsh
claiming that the proposed rise at Heathrow
ails to address the hub being over-priced,
over-rewarded and inefcient.
The act that airport charges account or
just over 5% o airline operating costs
somehow seems to have been orgotten.Maybe they can be orgiven or thinking
that airports are a licence to print money
because o the headlines airports such as
Incheon, Dubai and Heathrow make or their
commercial success the frst two make over
$1.6 billion per annum in duty ree sales, while
the latter is oten reerred to as a shopping
mall with runways.
However, the economic reality is somewhat
dierent or most other airports, with 70% o
the worlds gateways actually losing money.
In this economics and fnance ocused
issue we crush the myth that airports are
money-making machines, and try and fnd out
why so ew make a proft.We also have a special report on US airport
ownership and look at airport development in
China and the planned privatisation o
Greeces regional airports.
I once made an American airport manager
so mad at an ACI-NA lunch or daring to
suggest that the US should do more to
embrace airport privatisation, that he walked
away in disgust beore his main course arrived!
Id be interested to know his thoughts now
that San Juans Luis Muoz Marin InternationalAirport has been privatised.
Still on the subject o money, we discover
why New Orleans has fnally decided to invest
in its airport; turn the spotlight on a global
airport investor; review the benefts o energy
efcient terminals and highlight F&B
innovation in Australia.
Making money, ater all, is important as it
oten unds crucial new inrastructure and can
help keep airline costs down!
Other issues under the microscope in this
bumper issue include social media; airportleadership; rewards & recognition programmes;
IT innovation and airport sustainability.
I hope you enjoy it!
Airport Worldeditor, Joe Bates,
reflects on airport profitability,
changing business models in the
US and finding the funds to pay
for future airport development.
Printed in the UK by
The Magazine Printing Company
using only paper from FSC/PEFC suppliers
www.magprint.co.uk
Money
matters
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CONTENTS
5
3 Opinion
10 News12 Busy times
Joe Bates looks back at some o the highlights rom the recent ACI Asia-Pacifc Regional
Assembly, Conerence and Exhibition in Phuket.
15 Game onArica learnt more about the airport city phenomenon at the recent Airport Cities World
Conerence and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.
16 ACI news
19 View rom the topACI director general, Angela Gittens, reects on the importance o putting passengers frst
and the need to do more to promote a more positive public perception o airports.
20 Passage to IndiaOliver Clark talks to GVK Power and Inrastructure Limited chairman, Sanjay Reddy, about his
companys plans to modernise its airports in India and urther afeld.
24 Cautious optimismAn airline merger and a $6.5 billion capital improvement programme promise to breathe
new lie into Philadelphia International Airport, writes Nicole Nelson.
28 Airport proftabilityDespite the sizeable commercial profts o some o the worlds biggest gateways, the majority o
airports lose money. Graham Newton asks why and i anything can be done to reverse the trend.
34 New moneyIs the airport industry going to be the next big benefciary o Islamic fnancing? Umar Moghul
considers its merits and appeal or gateways looking to und key construction projects.
36 Chinas missionPeter Morris and Joanna Lu report on the fnancial challenges acing Chinas airports as the
country bids to upgrade its inrastructure to cope with uture growth.
AIRPORT WORLD/JUNE-JULY 2013
Issue 3Volume 18
Cover image courtesy ofRubberball/Mike Kemp/Getty Images.
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CONTENTS
7AIRPORT WORLD/JUNE-JULY 2013
40 American revolutionWith Puerto Ricos main gateway successully privatised and an increasing number
o airports adopting new business models, are times fnally changing in the US or
airport ownership? Joe Bates investigates.
46 Smooth operatorLeighFishers Annie Lindseth and Zoe Haseman and Albuquerques Felix Vivian
reect on several projects that reduce Albuquerque International Sunports costsby making it more energy efcient.
49 Everybody winsSusan Gray takes a closer look at F&B innovation in Australia as airports bid to boost
revenues and raise customer satisaction levels.
52 The time is nowJoe Bates reports on Louis Armstrong New Orleans International Airports plans to
transorm its image, acilities and operational capabilities with a new state-o-the-
art terminal.
56 Greek odysseyHans-Dieter Janecke talks us through the latest developments regarding the
governments plans to privatise Greeces regional airports.
58 Investor spotlightSamsung C&T Corporations vice president, head o strategic development,
Kwan Young Chung, talks to Airport Worldabout Incheon International Airport and
his companys aviation investment strategy.
62 More than just resultsDr Richard Plenty and Terri Morrissey reect on key skills and competencies required
by todays airport leaders.
66 Making the right connectionsUsing social media to communicate with todays new breed o connected traveller
can enhance an airports image, perormance and boost revenues, write David
McMullen and Shubhodeep Pal.
70 The people businessRecognising and rewarding good work and holding an annual Awards o Excellence
programme is part and parcel o enhancing engagement and being an employer o
choice, writes Christiane Beaulieu.
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RUNNING HEAD
8 AIRPORT WORLD/JUNE-JULY 2013
72 The way orwardThe evolution o airport IT systems and collaborative decisionmaking will transorm operations at the worlds gateways in the
years ahead, writes John Jarrell.
75 Health monitorFrancis Stone reports on the challenges, opportunities and
benefts to airports o adopting a globally accepted ramework or
reporting their sustainability perormance.
78 Sta watchAjay Jain takes a closer look at the latest identity management
solutions airports are using to monitor, manage and control staaccess to restricted areas.
81 Project watchPrince Mohammad Bin Abdulaziz International Airport.
83 Project watch extraJoe Bates and Steven Thompson turn the spotlight on
airport development projects in Indonesia, the Philippines
and Kazakhstan.
84 ACIs World Business Partners 87 Environment news
88 The last wordAirport Worldtalks to Dag Inge Rasmussen, chairman and
CEO o Lagardre Services.
90 ACI trafc trends
CONTENTS
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ACI Europe issuesState aid warningThe importance o Europes regional airports and an ever increasing
threat to their livelihoods due to proposed new EU legislation was top
o the agenda at ACI Europes Regional Airports Conerence &
Exhibition in Lyon.
In his opening remarks, ACI Europes director general, Olivier
Jankovec, noted that over the last 15 years, regional airports have
been the most dynamic segment o the European airport industry in
terms o passenger growth.
He said: Regional airports have been the primary enabler o
European connectivity, with more than 70 o them now hosting single
or even multi-airline bases. With most o Europe mired in recession,
their role as essential public transport inrastructure driving local
economic capabilities is coming to the ore.
More than ever, communities across Europe are relying on their
airports to support inward investments, exports, tourism and wider
economic regeneration.However, he warned that the European Commissions proposed
implementation o stricter rules on State aid or airports ACI Europe
believes that aid is crucial or airports handling up to one million
passengers per annum while the EU believes the fgure should be
only 200,000 posed a very real threat to uture survival o many o
Europes smaller airports.
He said that he eared that i the Commission gets its way, up to
80 airports across Europe aced the risk o closure.
Jankovec stated that the acts dont lie and that size really does
matter, with 51% o airports handling less that 5mppa and 65% o
those with less than 1mppa operating at a loss.
He told Airport World: We believe that the critical threshold or an
airport to be able to cover all o its operating costs is generally around
one million passengers per annum. So, on that basis, we are telling
the Commission that or airports handling less than one million
passengers, you need to allow some orm o operating aid.
We are not saying that this should take the orm o a blank cheque,
but there must be some possibility o public fnancing or these smaller
airports in recognition o their inability to cover their losses.
You have to remember that because o their size, it is much more
difcult or small airports to develop their retail and F&B concessions
and other sources o non-aeronautical revenue which they can then
use to attract airlines and develop their acilities.
To put it simply, in many ways public fnancing plays the role that
non-aeronautical revenues do or the bigger guys. Losing any small
regional airport will decrease connectivity and have damaging
consequences or surrounding communities and economies.
Jankovec also claimed that it was time or the EU to address and
eectively outlaw the one-bag policy being imposed by certain
low-cost carriers due to its detrimental impact on vital retail/F&B
revenues at regional airports.
Later in the conerence, the Europe Commissions head o unit,
Alain Alexis, came under fre rom delegates or the EUs alleged
anti-competitive legislation towards small airports and or allocating
32 billion to the rail industry and just7 billion to aviation, which
was argued didnt allow or a level playing feld.
Other topics covered during the conerence included enhancing
relationships with the community/local businesses/government; marketing
and social media; and regulatory ramework opportunities and threats.
10
NEWS
AIRPORT WORLD/JUNE-JULY 2013
News in briefThe Australian Competition and ConsumerCommission (ACCC) has revealed that passengersatisaction levels at Sydney Airport are at theirhighest levels or 10 years. According to the ACCCsmonitoring report, greater value and choice across theairport and strong investment in improved acilitiesare the key reasons or rising satisaction levels.
Los Angeles International Airports new breed ovolunteers are a lively bunch, drink a lot o waterand are a bit urrier than normal but its alright,as they are dogs! The our-legged volunteers are
part o the gateways new PUP (Pets UnstressingPassengers) initiative.
Dubai International Airport has become theworlds leading hub or A380 operations,according to published airline industry ightschedule data or 2012. The data shows theairport had 7,259 A380 scheduled ights to
28 destinations, the majority o which wereoperated by Emirates. Paul Grifths, CEOo Dubai Airports, said: The openingo Concourse A earlier this year was a
$3 billion validation o our intention to bethe worlds premiere A380 hub.
Italian specialty store Bottega dei Sapori willopen at Pittsburgh International Airport (PIT)this summer. In March this year, AIRMALLannounced its partnership with Airest Collezionito bring a selection o luxury brands to PIT. The
new stores are part o a $10 million upgrade, ayearlong construction project that will result inthe most signifcant overhaul o the concessionsprogramme since the airport opened in 1992.
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Terminal 2B at Paris-CDG has closed or aacelit. Operator, Aroports de Paris (ADP),claims that ater 30 years service, the timeis right or its signifcant redevelopment. Itinsists that the revamp is part o its drive toincrease the satisaction o passengers andairlines by adapting acilities to the higheststandards o quality.
Melbourne Airport has welcomed the FederalGovernments approval o its Southern PrecinctProgram. Phase 1 o the project includesdevelopment o a new domestic terminal acility,
17 new aircrat parking bays, dedicated groundtransport acilities and signifcant road upgrades.Melbourne Airport CEO, Chris Woodru, said: Wewill look to fnalise discussions with our airlinecustomers with a view to the new terminal beingoperational by mid 2015.
The UKs Lydd Airport is to be revived as a smallregional airport ater the government gave the
go-ahead or a 9 million expansion plan. Theairport also known as London Ashord Airport was frst opened in the 1950s and, at its heightin the mid 1960s, handled 250,000 passengers
a year. The new plans will increase passengercapacity to 500,000 per year and create morethan 300 new jobs or the area.
Stockholm Arlanda has ofcially inaugurated itsnew-look Terminal 2, claiming that a 2,000sqmexpansion o the acility makes it bigger, betterand more passenger-riendly. The expansionhas allowed or the introduction o a range o new
retail and F&B outlets and is expected to boostpassenger ows. The near 50 million upgradeis expected to be completed in 2015 with theaddition o a new baggage sorting system.
For daily news updates, visit www.airport-world.com
Honolulu upgrade commencesAn extensive improvement project at Honolulu International
Airport has begun with groundbreaking or a new Aloha Air Cargo
(AAC) acility.
The $12m AAC terminal, being built with private investment, willconsolidate cargo operations, support ofces and customer service
operations into a single location.
The acility is part o the gateways $750m overhaul under a
state-wide Hawaii Airports Modernisation Program designed to ensure
that it is equipped to handle rising trafc demand.
The acelit will include runway and taxiway improvements as well
as the new Diamond Head Commuter Terminal and L-shaped
Muaka Concourse, which is to be built on the site o the current
commuter terminal.
Completion o the entire project is scheduled or the third
quarter o 2017.
Whats cooking at HeathrowThe hosts o the TV show MasterChe UK John Torode and Gregg Wallace
have been signed up as ofcial ood tasters or Heathrow Airport.
The pair two o the UKs best known ood lovers have been
given six months to improve the dining experience at the airports
73 F&B outlets. They have also been tasked with introducinghealthier ood choices across the terminals and creating a platorm
to champion British culinary talent. Their experiences will be used
to orm Heathrows frst ever ood guide.
Ben Crowley, head o F&B at Heathrow, said: We want to continue
to innovate to be the best in our league or airport dining.
Big money for newIstanbul airportThe Turkish government has awarded the concession to build and operate
Istanbuls new8 billion gateway to Turkeys Cengiz-Kolin-Limak-Mapa-Kalyon
consortium.
The consortium won the contract ater agreeing to pay the Turkish
government a hety22.1 billion over a 25 year period ollowing the airports
planned 2017 opening.The news is a huge blow or both Turkish airport operator, TAV Airports
Holding, and Germanys Fraport Group, both o which made it through to the
fnal stage in the bidding session.
Both TAV and Fraport the latter bidding in a joint venture with Turkeys
IC Holding withdrew rom the race when the price or the airport soared
beyond their expectations.
TAV Airports CEO, Dr Sani Sener, commented: Knowing that this is not
solely a construction project, but operational capability is pivotal, we have
declared that we would not aim at winning the tender at any cost. Such an
approach would jeopardise the companys health, as well as the uture o the
Turkish economy and aviation sector.As per our smart growth strategy, well continue to pursue new
opportunities around the world. I hope that the result o this tender would
beneft highly our country and its aviation industry.
The new airport will eventually have three runways or simultaneous
use and a capacity o up to 150mppa.
Russia looking to the EastThe Russian government is planning to invest $3.2 billion on upgrading the
airports in its Far East Federal District, according to Economic Development
Minister, Andrei Belousov.
According to preliminary design documentation revealed by the Belousov,work will start on the revamp in the coming months in a bid to modernise the
main gateways o the largest o Russias eight ederal districts by 2017.
The frst airports to beneft rom the modernisation and reconstruction
programme are expected to be Petropavlovsk-Kamchatsky and Ulan-Ude, as
Russias Ministry o Transport recently announced that they lacked the
inrastructure and technology to match their strategic importance.
They will be ollowed by projects at a urther 59 small to medium
size airports across the Far East Federal District.
Belousov claims that the upgrade will act as a catalyst or the growth o
long-distance domestic ights within Russia as well as new international
services to destinations such as the Middle Asia and North America.
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EVENTS: ASIA-PACIFIC CONFERENCE
AIRPORT WORLD/JUNE-JULY 2013
Despite the beautiul backdrop o Phuket, business and the
opportunities and challenges acing Asia-Pacifcs airports
remained top on the agenda at the recent ACI Asia-Pacifc Regional
Assembly, Conerence and Exhibition in Thailand.
This years Airports Authority o Thailand hosted event attracted over
400 delegates rom 33 countries, ew o which would have been let in any
doubt about the huge growth potential o the region.
Indeed, conerence sessions about the role airports play in advancingtourism and economic development; sustainable development; as well as
planning the uture o airport operations and driving cultural changes
within airport organisations, all provided a brie snapshot o the type o
challenges and opportunities acing ACIs astest growing region.
In his opening remarks, Tan Sri Bashir Ahmad Abdul Majid, managing
director o Malaysia Airports Holdings Berhad and president o ACI
Asia-Pacifc, reminded delegates that trafc across the region increased by
7.5% in 2012, and showed no signs o slowing down.
Our airports handled 1.5 billion passengers last year thats 30% o
the world market. The top fve airports in the world in terms o service
delivery, also always come rom our region. So, in terms o trafc growth,operational efciency and service levels to customers, we did very well.
But this is just the start, as orecasts predict that this region will grow
much urther and become the biggest aviation market in the world. There is
huge potential as ar as Asia-Pacifc is concerned. But this also brings its
challenges. Passengers will become more selective, more discerning and
want even higher levels o service rom us in the coming years.
We must be up or the challenge. We must ensure that our airports
have the capacity to accommodate the growth that is going to take place
in this part o the world. We must have the capacity to allow airlines to
grow and ensure that we have the acilities and services to meet
customer expectations.
They are huge challenges, but I am very confdent that based on what ourairports have done in the last couple o years, we will be able to meet the
challenge. But we certainly wont be able to do it by ourselves, we must realise
that in order or us to deliver what we are expected to do as airports, we must
work with our stakeholders. This means governments, World Business
Partners, tourism ministries, the airlines and others to achieve our goals.
He added: ACI will continue its eorts in advancing the interests o
airports and together with other stakeholders, will aim to provide the
travelling public with an air transport system that is sae, secure, efcient
and environmentally responsible.
In his keynote address at the conerence, Xiaoyu Zhao, vice president
o the Asian Development Bank noted that Kathmandus TribhuvanInternational Airport and others in Bhutan, Aghanistan, Laos and Fiji
were among the many smaller airports across the region to have
benefted rom fnancial aid rom the bank.
The theme o the 2013 conerence was Sustainable Airport Business
Expanding Aviation Beyond Boundaries, so it was ftting that tourism, and
specifcally the role airports play in tourism development, was the subject
o the frst session.
Moderator, ACI Worlds World Business Partner chairman and Airbiz
managing director, Greg Fordham, noted that Melbourne Airports success
in attracting Emirates to the gateway in the mid 1990s was a perect
example o what can be achieved.Back then, Melbourne was considered the rust belt o Australia due to
the industries it had lost, recalled Fordham. People were leaving it in their
droves and all international trafc to Australia came through Sydney, so its
decision to work with the government o the State o Victoria to attract
Emirates came somewhat rom the let feld.
The strategy seemed even more bizarre because back then nobody had
heard o Emirates or Dubai, let alone thought about travelling with a Middle
Eastern carrier. But they made it happen, and in 1996 it launched three
services a week to Melbourne. Today it operates three services a day to
Melbourne and 84 weekly to Australia, many with A380 aircrat.
Melbourne Airport has since developed the strategy and is now
ocusing very much on China. As a result, the airport is tailoring its retail,branding and even signage to the Chinese traveller. Victorias government
is signing sister city agreements and trade deals and Tourism Victoria is
looking at marketing campaigns with airlines.
BusytimesJoe Bates looks back at some of the highlights from the recent ACI Asia-Pacific Regional
Assembly, Conference and Exhibition in Phuket.
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EVENTS: ASIA-PACIFIC CONFERENCE
13
It just shows what can be done i you dont always ocus on the
obvious and recognise that airports have a key role to play as the team
leader in co-ordinating targeted strategies or the growth and development
o air services.
Next up, ACI Worlds senior manager, environmental protection, Xavier Oh,
called sustainable development, aviations permission to grow, and warned
airports not to orget the importance o communicating with local communities.
Day two began with a lively and entertaining debate about driving
organisational change. Dubai Airports senior vice president, Jill Nealon,noting that her companys commitment to delivering integrity at the same
time as coping with huge growth and expansion, was no easy task.
For Dubai Airports, said Nealon, the process included re-writing all o
its strategic policies; introducing a new code o conduct; giving managers
clear guidance notes (in six dierent languages as 37 dierent
nationalities are employed at the airport); making leaders more
accountable; fne-tuning its perormance management system (PMS)
and developing new training and educational programmes.
Nealon told delegates that Dubai Airports had also introduced an
employee engagement survey that provides sta with the opportunity to
give eedback on their bosses, and underpinned everything with
communication, communication, communication.She cited a cleaner that recently ound and handed in a bag containing
passports, $10,000 in cash and jewellery as a antastic example o honesty
and integrity at Dubai Airports.
In other news, Eric Miart, environment activities account manager
and consultant to ACI World on A-CDM, warned that airports ailing
to adopt collaborative decision making would continue their business
as usual, miss a lot o opportunities and probably become a uture
second class airport.
He said: However, with A-CDM, you will be in a better position to
meet the coming challenges. You will remain a frst class airport, you will
improve your efciency and get other benefts such as improved saety
and environmental perormance.And Bangkoks Suvarnabhumi International Airport, Mumbai
Chhatrapati Shivaji International Airport and Hong Kong International
Airport were congratulated or their eorts in managing and reducing their
carbon emissions at the airports, under ACIs Airport Carbon Programme.
ACI Asia-Pacifcs regional director, Patti Chau, said: Airport
Carbon Accreditation was frst extended to our region in November
2011 and eight airports have been accredited since then. I am especially
delighted to welcome Hong Kong International Airport as the frst
airport in Asia-Pacifc to achieve the Airport Carbon Accreditation
Optimisation level.
The CEO and Leaders Forum eaturing Tan Sri Bashir Ahmad Abdul
Majid; Sydney Airport chairman, Max Moore-Wilton; Ghanem Al-Hajri,chairman o Sharjah International Airport; and Vince Scanlon, general
manager airport operations or Adelaide Airport, provided an entertaining
and sometimes humorous end to an enjoyable conerence. AW
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EVENTS NEWS: AIRPORT CITIES
I
t is surely a sign o the increasing importance o emerging markets
that the Airport Cities World Conerence and Exhibition (ACE) was
held, or the frst time, in Arica.
The annual event was hosted by the City o Ekurhuleni, known asSouth Aricas workshop and home to the continents busiest
gateway, Johannesburgs OR Tambo International Airport.
The city, just to the east o Johannesburg, already has bold plans
to become Aricas frst aerotropolis, and more than 700 delegates
rom 45 countries, representing over 100 airports or airport
authorities, were in Ekurhuleni to hear more about its ambitions.
The conerence was also given updates and progress reports rom
some o the most signifcant airport city projects across the globe.
Following sight-seeing tours, including a trip to the Apartheid
Museum, Nelson Mandelas amily home, Desmond Tutus home, and
the Oliver Reginald Tambo cultural precinct, delegates were taken onan Airport City Tour and then attended pre-conerence master-classes
run by event chairman, Proessor John Kasarda.
The conerence, held at the Emperors Palace Hotel, saw Deputy
Minister o Transport or South Arica, Sindisiwe Chikunga, deliver the
welcome address.
She noted that ACIs most recent orecast predicts that global
passenger numbers will grow to 12 billion in the next 20 years and
said that despite the current economic climate, this positive outlook
should encourage us to address the long-term aviation needs o our
respective countries.
Developing airports remains a priority or this South Arican
government. We must deliver airport inrastructure to delivereconomic growth, added Chikunga.
She said South Arica had a network o 135 civil aviation airports
which played a signifcant part in the 2010 FIFA Football World Cup.
Chikunga also commended the City o Ekurhuleni or its vision in
developing the Ekurhuleni Aerotropolis, concluding: The Department
o Transport embraces the concept o the airport city and aerotropolis
to meet the social and economic goals o this country.The frst day o the conerence culminated in the Gala Evening at
the nearby Germiston Lake.
On day two, delegates split into two streams and attended
sessions on topics including governance and strategic roadmaps,
investment and inrastructure management, commercial
development and real estate, airport design and non-aeronautical
revenue development.
The emerging markets session saw Kasarda introduce speakers
such as Sanjay Khanna, o GVK, who talked about Mumbais
ambitious SkyCity project. He revealed GVK was on the brink o
gaining government approval or the development.Khanna said: It has been a three year planning process and we
are just about to get approval rom the government. I think it will be a
nice development or the city o Mumbai.
Graham Bolton, o ARUP, then painted an encouraging picture o
the scene in emerging markets. He said there was ertile ground or
aerotropolis developments, adding that they already orm an integral
part in master planning or new airports.
ACE was brought to a close with the Farewell Reception held by
Malaysia Airports Holdings Berhad (MAHB), the host or next years
event in Kuala Lumpur.
The arewell event saw the unveiling o the new Airport Cities
Excellence Awards, which will take place or the frst time in12 months time. With so many promising airport city and
aerotropolis projects on show this year, there is bound to be plenty
o competition or the top awards in 2014.
Africa learnt more about the airport city phenomenon at the recent Airport Cities World
Conference and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.
AW
Game onImages courtesy of airportcities.aero.
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ACI World Governing Board vice president, Rick Piccolo, and other
senior airport executives met at the headquarters o the
International Civil Aviation Organization (ICAO) in Montral this
March or the once-a-decade Air Transport Conerence.
The fve-day conerence, which was only the sixth such event since ICAO
was ormed in 1944, sought to address and resolve economic policy issues in
avour o a uture that includes an economically viable and sustainable air
transport sector.
Attended by over 1,000 delegates rom more than 200 States and
international organisations, the conerence included the presentation o over
100 working papers, including seven rom Airports Council International.
The papers presented at the conerence sought the development o ICAO
policy on aviation economics, liberalisation, air competition, taxation and
charges, and consumer protection.Speaking on the Freedom to do Business Panel at the pre-Conerence
Symposium on Sunday March 17, Piccolo stated that the regulatory environment
was very dierent at the time o the last Air Transport Conerence in 2003.
Today, regulators needed to allow market orces to work or airports in the
same ashion that was made possible or airlines, said Piccolo, who noted
that ACI supported the principles o eective market access, transparency,
non-discrimination and air competition.
He said that the market could be harsh, and airports took risks investing
in new inrastructure since there was no guarantee that airlines would utilise
this inrastructure in the long-term.
On the symposium panel discussing Consumer Protection, managing
director o Malaysia Airports Holding Berhad and chair o ACI Asia-Pacifc,
Tan Sri Bashir Ahmad Abdul Majid, observed that passengers expectations
were increasingly demanding and that handling their many needs
was challenging.
But he remarked that, thankully, or the most part, service provided to
passengers by airports and airlines was very high.
Problems generally arose when things went wrong, and it was important
or the industry to work together to develop common procedures, and here
ICAO could provide a suitable orum.
He warned that i industry did not act, there was a risk that
government regulations would be introduced which could be out o step
with industry capabilities.
Robert Deillon, CEO o Geneva Airport and ACI Europe Board Member,
speaking on the symposiums panel on Taxation, called or the need or
light-touch regulation. He said that this was necessary as the increased
competitiveness o airports meant that concepts such as single till were
outdated, and that competition and contestability meant that detailed
regulation could impede inrastructure development and improvements tocustomer service.
Speaking about the ICAO conerence, Angela Gittens, director general o
ACI, said that ACI was consolidating its international representation role as
the voice o the worlds airports.
She added that the level o engagement that ACI was able to muster was
testament to the increased stature and importance o airports in shaping the
international aviation policy agenda.
In addition to the speakers at the pre-Conerence Symposium, airports
were represented by the chair o ACI-North America, David Edwards, executive
director o Greenville-Spartanburg International Airport; ACI-NA president,
Greg Principato; and the regional director o the Asia-Pacifc, Patti Chau.
During the Conerence, ACI presented working papers on MarketLiberalisation, Slots and Night Curews, Passenger Protection, Airport
Competition and Economics o Airports; and jointly presented papers with
CANSO and IATA on taxation and modernising air trafc management.
ACI WORLD NEWS
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ACI brings the Voice of the Worlds Airports to ICAOs Air Transport Conference.
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ACI WORLD NEWS
ACI offices
ACI World
Angela Gittens,
Director General
PO Box 302
800 Rue du Square Victoria
Montral, Quebec H4Z 1G8
Canada
Tel : +1 514 373 1200Fax : +1 514 373 1201
www.aci.aero
ACI Fund or Developing
Nations Airports
Angela Gittens,
Managing Director
c/o Geneva,
Switzerland
Tel: + 1 514 373 1200
Fax: +1 514 373 [email protected]
ACI Asia-Pacifc
Patti Chau,
Regional Director
Hong Kong SAR, China
Tel: +852 2180 9449
Fax: +852 2180 9462
www.aci-asiapac.aero
ACI Arica
Ali Tounsi,
Regional Secretary
Casablanca, Morocco
Tel: +212 619 775 101
www.aci-arica.aero
ACI Europe
Olivier Jankovec,
Director General
Brussels, Belgium
Tel: +32 (2) 552 0978
Fax: +32 (2) 502 5637
www.aci-europe.org
ACI Latin America & Caribbean
Javier Martinez Botacio,
Director General
Quito, Ecuador
Tel: +593 2294 4900
Fax: +593 2294 4974
www.aci-lac.aero
ACI North America
Greg Principato,
President
Washington DC, USA
Tel: +1 202 293 8500
Fax: +1 202 331 1362
www.aci-na.org
ACI represents 573 members operating 1,751 airports in 174 countries and territories, which in 2011 handled 5.4 billion passengers, 93.1 million
tonnes o cargo and 77 million aircrat movements. ACI is the international association o the worlds airports. It is a non-proft organisation,
the prime purpose o which is to advance the interests o airports and promote proessional excellence in airport management and operations.
ACI events
September 22-25
ACI North America
Annual Conerence
& Exhibition
San Jose, USA
2013 2013
June 10-12
ACI World Annual
General Assembly
ACI Europe Congress
& Exhibition
Istanbul, Turkey
2013
November 2-5
ACI Latin America &
Caribbean Regional
Conerence &
Exhibition
Montevideo, Uruguay
2013
October 19-23
ACI Arica Regional
Conerence &
Exhibition
Lom, Togo
July 29-31
ACI World/ACI Latin
America & Caribbean,
Airports Economic
Regulation Conerence
Mexico City, Mexico
2013
AIRPORT WORLD/JUNE-JULY 2013 17
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Airport directors and operators pride themselves on
placing passengers at the heart o their operations.
In my travels, I see countless examples o thoughtuldesign and well-managed passenger acilitation
initiatives, and learn o many more in my conversations with ACI
members, government oicials and other industry stakeholders.
Airports leaders know the value o placing passengers irst and
consequently have invested in acilities and woven airport
business strategy around passengers. This we know.
From the passenger perspective however, airport acilitation
eorts are oten an airports best kept secret. As airport leaders,
we are oten so busy managing our operations and rolling out new
initiatives that we ail to invest in promoting the value and even
existence o our passenger acilitation investments and projects to
our most important stakeholder the passenger.We can all attest to the act that without a gentle nudge in the
right direction, airport passengers can choose to view the glass
hal empty rather than hal ull. But pointing out what we do
today, can go a long way in helping airports to move the
public perception needle to accurately relect the reality
that airports acilitate the travel experience, protect passengersand serve as the passengers advocate in our dealings with
the many parties that control or aect the passenger journey
through the airport.
As a key priority, ACI is developing strategies and practical
tools to help our member airports better promote the tangible
and intangible ways in which they positively impact the
passenger journey.
Our goal is to help the airport sector assume its earned seat in
the arena o positive public perception or its eorts to minimise
disruptions, problems and delays and continuously strive to
improve the passenger experience as well as boost local and
national economies by acilitating commerce, tourism andgenerating employment.
We will share news with you very shortly as we reach inal
consensus on a co-ordinated global industry approach. AW
ACI VIEWPOINT
AIRPORT WORLD/JUNE-JULY 2013 1919
1
ACI director general, Angela Gittens, reflects on the importance of putting passengersfirst and the need to do more to promote a more positive public perception of airports.
Viewfrom the top
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Oliver Clark talks to GVK Power and Infrastructure Limited chairman, Sanjay Reddy, about his
companys plans to modernise its airports in India and further afield.
20 AIRPORT WORLD/JUNE-JULY 2013
Passage to India
Standing on the waterront in central Mumbai is the
Gateway to India; a huge stone archway built in Victorian
times to celebrate the arrival o what has become an
enduring image o the city and an attraction visited by
millions every year.
So, it is perhaps ftting that later this year, Mumbais Chhatrapati
Shivaji International Airport (CSIA) will unveil its own gateway to India
which it hopes will be equally iconic the revamped Terminal 2.
Dubbed T2, the reurbished acility will consist o our
integrated levels covering more than 439,000sqm, with new
taxiways and aprons, 21,000sqm o retail space and give theairport the capacity to cater to 40 million passengers annually.
Oering what has been billed as unrivalled levels o customer service
and state-o-the-art acilities, T2 will handle the airports international
operations and will be the frst thing millions o international tourists
experience as they arrive in India or the frst time.
A huge exhibition area will showcase Indian art through the
centuries with touch screens or visitors to explain each piece and
learn about its history and origin.
It is also the culmination o years o work by operating company
GVK to modernise and expand CSIAs acilities to ensure it can
handle the ever-growing passenger numbers registered by
the gateway, while also positioning it to become a leading
international hub.
I think the opening o Terminal 2 represents one o themost important milestones in the history not only o CSIA but also
o Mumbai, says Sanjay Reddy, chairman o GVK Power and
Inrastructure Limited.
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T2 will make CSIA a gateway to both the city o Mumbai and the
hinterland or millions o international passengers and, more
importantly, we are setting new benchmarks in ways o operating, it
will receive global recognition or its design and quality o service.
Reddy, the son o GVK ounder GV Krishna Reddy, has a diverse
portolio o businesses to oversee. They include energy, resources,
airports and transportation inrastructure.
And he has steered the groups ever-expanding airport profle,
which now includes Chhatrapati Shivaji, Bengaluru, and, will sooninclude a terminal at Denpasar in north Bali and a new greenfeld
airport at Yogyakarta.
Reddy says the T2 project was not without its challenges. GVK
planners were hampered in the frst instance by the act the airport is
hemmed in by urban development making expansion difcult. Delays
and the regions weak fnancial outlook also had a knock on eect on
passenger growth orecasts, but the construction is now on track.
The new acility represents the cornerstone o GVKs route
development strategy, which seeks to attract new carriers rom
Europe, Asia, Russia and the CIS and North America under the
campaigning title A hub in the making.
With this in mind, T2 has been designed to handle large volumeso connecting passengers and to allow airlines to easily organise banks
o arrivals and departures, two elements that are seen as crucial by
GVK to make CSIA an enticing proposition or long-haul carriers.
While its ultra modern acilities will no doubt prove attractive
to airlines, Mumbai serves as the beating heart o Indias inancial,
business and entertainment industries, many oering compellingreasons or carriers to come, says Reddy.
I think airlines are going to be attracted to Mumbai because
it is the commercial centre o India and ideally located or
international routes. There is currently a good mix o dierent
carriers, but we are targeting long-haul airlines connecting Europe
and the US and emerging markets such as China, Arica and South
America, says Reddy.
According to its route development action plan, GVK is seeking
new services to Manila, Ho Chi Minh, Jakarta, Beijing, Guangzhou,
Moscow and Tehran in the next one to two years, ollowed by
services to Rome, Lisbon, Manchester and Seoul amongst others
over the coming decade.The airports eorts are already bearing ruit and it celebrated a
new Air China service to Chengdu last year.
Customer service
The new Terminal 2 represents the culmination o GVKs brie to
improve the customer experience and capacity o CSIA.
When it was awarded the contract to operate CSIA in 2006, the
airport was congested, its acilities were in a bad state and it had
a reputation among passengers or delays and lengthy queues.
Proo o what has been achieved since can be ound in the
host o awards or customer service and saety, including theprestigious Golden Peacock National Quality Award or 2012
rom Indias Institute o Directors, and the ACI ASQ award or
2011 in the 25-40 million passengers per annum category.
For Reddy the awards are a nice recognition o what has been
at the core o GVKs business philosophy or decades.
As ar as customer service is concerned, I believe it is o
paramount importance. Our amily business began in the
hospitality sector and we have hotels as well as airports; as
a amily, we very much believe in hospitality as the core o our
business, he says.
But Mumbai was only the beginning o GVKs airport ambitions,
and just three years ater taking over Mumbai, the companyormed the major part o a consortium that was awarded
the contract to manage Bangalores newly opened Bengaluru
International Airport.
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Navi Mumbai
With scope to expand CSIA limited by its location, the Indian
government has given the go-ahead or a new international airport
to be built on the outskirts o the city.
Named Navi Mumbai International Airport, it will be managed
by a private company on a similar model to CSIA. So does Reddy
see it as a potential threat? Not at all he says, as Navi is intended
to be primarily a domestic airport.It is not going to be a threat at all. We have a very unique
situation. Perhaps Mumbai is the only case in the world in which
an international airport is rebuilt but because o traic increases,
a new secondary airport is built. Typically, the existing airport is
destroyed or turned into a secondary airport.
Reddy also points out that GVK can bid to also run Navi Mumbai
and i this contract was orthcoming we would develop it as a
complementary airport to the acility we have here and not competing
or trafc.
BengaluruBengalurus traic grew rapidly ater its completion, and once
again, the Indian governments brie was that the private
operator should expand the acility and improve services as
beitting o an airport that serves as the home o the countrys
burgeoning IT capital which has been described as the Silicon
Valley o India.
A year ater taking over Bengaluru, operating company Bangalore
International Airport Ltd (BIAL) unveiled an ambitious development
programme including the expansion o the existing Terminal 1 to
cater or 36 million passengers.
Work began in August 2011 at a cost o $221 million, and involves
the extension o the terminal in both directions with improvementsincluding better access to seating, amenities and commercial
acilities and smoother check-in and departure processing.
The project is expected to be completed by the summer o 2013.
When we decided to expand Bengaluru, our priority frst and
oremost was to improve the passenger acility and expand the
terminal because there was a dire need or more capacity as it was
handling more than 12 million passengers. With the completion o
this work, the acilities will be able to handle between 18-20 million,
explains Reddy.
Passengers will also experience a next generation o acilities
and amenities, beams Reddy.Meanwhile, BIAL is pursuing a route development strategy that
centres on making Bengaluru the gateway to southern India. In
2011, the airport attracted six new international airlines including
Etihad, Tiger, Cathay Paciic and Bangkok Airways.
According to Reddy, BIAL sees IndiGo and Jet Airways as partners
who can help develop the airports regional network urther.
Indonesia
In November 2012, GVK took a step in a new direction with the
signing o a contract with Airports Authority o Indonesia (Angkasa
Pura Airports) to manage to manage non-aeronautical commercialoperations at Balis Ngurah Rai Denpasar International Airport
under a ive-year operations and management contract.
Ngurah Rai is Indonesias second busiest airport ater the
capital, Jakarta, and is severly congested leading to the need or
an overhaul o its acilties.
GVK also has signed a memorandum o understanding with the
Indonesian government to develop an international greenield
airport in Yogyakarta in central Java.
Reddy is excited about the prospects o both projects.
The government is very keen on the [Yogyakarta] project; there
is a lot o potential as a tourism attraction but currently transport
is severely limited.With GVKs already long experience o managing and modernising
overcrowded airports into award winning acilities, they should have
little trouble with their new Indonesian projects. AW
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